Glasgow & West Scotland

Rangers administrators challenge £24.4m Ticketus deal

Craig Whyte bought Rangers for £1
Image caption Rangers owner Craig Whyte entered the deal with Ticketus

Rangers administrators have launched a bid to try to end the club's £24.4m season-ticket deal with Ticketus.

Duff and Phelps are seeking a court declaration on the status of the ticket deal, which was struck by owner Craig Whyte during his purchase of the club.

Lawyers for finance firm Ticketus claim the deal is legally binding.

Duff and Phelps want to tear up the agreement on the basis that the debt could discourage bidders who may want to takeover the club.

Paul Clark and David Whitehouse of Duff and Phelps are seeking directions on the issue from a judge at the Court of Session in Edinburgh.

Administration hitch

The insolvency practitioners are currently acting as interim managers after a defect in the administration process over Financial Services Authority approval to call in administrators at Rangers.

Ticketus maintains that they do not have the power to unilaterally terminate the agreements and argued that the move was premature.

Ronald Clancy QC, for Ticketus, said: "There is no basis for the assertion that there is a really serious risk that the bidding process will in some way be badly affected by the absence of directions."

Image caption Rangers administrators are challenging the creditor status of Ticketus

He also warned that the firm would have "an unanswerable claim" for about £27m if the agreement was terminated.

Mr Clancy said if Rangers was rescued as a going concern it would mean the company exiting administration with the Ticketus arrangements in force "unless the directions sought here are granted".

He argued that the claim, that if the agreements remained in force with the income from season ticket sales not being available then potential investors would not make a realistic offer, was "speculative and unwarranted".

Mr Clancy said it was only after investment proposals had been received and properly evaluated that an assessment could be made.

He told the court that if the legal move was granted it would give Duff and Phelps "a mandate to terminate" the agreements with Ticketus regardless of the circumstances after the Friday deadline for bids for the club.

"It also might prove to be wholly unnecessary if the proposal from Ticketus, and the other parties they have joined forces with, turns out to be the only credible bid or is clearly the best among rival bids," he said.

Cash access

"Ticketus are part of a large specialist fund management business and they have immediate access to large amounts of cash, more than sufficient to fund an investment in the club."

The interim managers said that under the agreement, Ticketus bought two tranches of tickets for Rangers - the first for £20m plus VAT and the second for £5m plus VAT.

More than £18m from the first amount in May last year was for payment to Lloyds Banking Group during venture capitalist Mr Whyte's takeover at Ibrox.

Season ticket sales are one of the main sources of income for Rangers generating about £12m a year.

The interim managers claim that even the uncertainty over the rights of Ticketus to that future income was likely to deter potential investors making a realistic offer.

They maintain that if they were to be prevented from terminating the agreements that would "frustrate or at the very least seriously impede the purpose of the proposed administration".

They accept that termination would be in breach of the agreements.

'Degree of clarification'

They said that Ticketus' position was that they had no power to do so and in those circumstances they were seeking directions from the court.

David Sellar QC, for the interim managers, said it was a matter of common sense that if there was uncertainty over an important income stream it would reduce the amount of money that anyone was going to offer.

"We are attempting to find some degree of clarification as soon as possible," he said.

Judge Lord Hodge said if matters came to a head next week that if the court could accommodate a hearing it would do so.

The hearing on directions continues.

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